When It Comes to Digital Insurance Experiences, Executive and Customer Perceptions Are Wildly Different. Here’s How to Align Them.
Balazs Fejes, President, EU & APAC Markets, EPAM Systems, Inc. explores why in Epams latest blog.
Digital transformation. Most insurance executives say they are obsessed with the idea.
So why have their digital investments failed to win customers and put them ahead of the competition? New research reveals that poor user experiences are to blame.
Insurance Customers Are Migrating Online…
Why are insurance companies moving online? Simply put, that’s where their customers are. In 2017, 27.5% of customers planned to purchase or renew their insurance policies through digital channels. During COVID, this increased to 54%.
Despite this, online channels have so far failed to make a dent in insurance distribution. Only around 6% of life insurance and about 23% of car insurance policies are purchased online.
Where is the Digital Revolution?
Why are there more digital channels than ever, but online sales are so low?
To find out, a research study was conducted with members of the insurance industry in Switzerland to evaluate consumer behaviour data and online customer journeys. C-level stakeholders from the 15 top insurance companies in Switzerland also were interviewed.
The results indicated that customers are not buying insurance products online because companies are selling them the wrong way. Technology is not the failing factor; the user experience is.
Know Thy Customer
The study found that many insurers didn’t even know they were providing poor experiences. When asked to rate their most critical digital journeys, the average answer was 78—notably higher than the evaluated average of 43.
This indicates a huge perception gap, and insurers need to become aware of their customer experience (CX) problems to fix them.
The key to success is customer-centricity. On average, the leaders believed that their customer-centricity is 58— higher than the average evaluated score of 36.
Additionally, many executives haven’t experienced the customer journey themselves. Only 30% of those interviewed had experienced the online purchasing journey.
Repairing the Fractured Customer Journey
The customer journey is broken because insurers are (a) replicating offline journeys with online processes without any adjustments; or (b) making the digital journey incredibly complex without realizing it.
When companies only have a limited number of interactions with their customer per year, they must use that time to impress them. If insurers are going to invest millions into digitalizing the customer journey, they need to experience it themselves.
To note, taking existing processes and applying them online is a formula for failure. Insurers must create human-centred experiences through technology. That requires not only technology experts, but also experts in psychology, ergonomics, and human-computer interaction.
Becoming a digital company does not mean simply buying technology. Insurers must invest in lasting organizational change to ensure that technology is harmonized with their customers’ experience.
If done right, insurance companies can capture customer attention, develop direct-to-consumer channels and build brand loyalty.
The Advisor Gap
The research identified a second gap in the insurance industry: the role of the advisor.
A recent Consumer Banking Report revealed that 44% of Gen Z and 42% of Millennials would like to see advice drop-in services at their bank. When insurance executives were asked about the relationship between brokers and consumers, 100% said that they are trying to improve it through digital tools. Only 30% were working on changing the role of the agent. And only 20% tried to map the agent journey and their pain points.
Insurers need to transform into the type of people that millennials will take advice from. To do this, they need to build the tools, capabilities and training to foster a culture of authenticity.
Become the Unhappiest Customer
Bill Gates once said, “Your most unhappy customers are your greatest source of learning.” Insurers must become their unhappiest customers by walking through customer journeys. Human-centered designers need to be onboarded to create journeys that excite customers. Then they must measure, measure, measure. Being “good enough” will no longer cut it.
Click here to download the report.
